The Commissioner Of Income Tax – 3, Mumbai v. M/S.parekh Marine Agencies Private Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.2293 OF 2009 The Commissioner of Income Tax – 3, Mumbai ..Appellant. Versus M/s.Parekh Marine Agencies Private Limited ..Respondent. Mr.Vimal Gupta for the appellant.Mr.Atul K. Jasani for the respondent. CORAM : Dr.D.Y. Chandrachud & J.P. Devadhar, JJ. J.P. Devadhar, JJ. DATE : 15[th] Ferbuary, 2010. P.C. : 1.The appeal was admitted on the following substantial questions of law: A) Whether, on the facts and circumstances of the case and in law the Tribunal was justified in holding that the Block Assessment is bad in law as the Notice u/s. 143(2) of the Income-tax Act has not been issued by the Assessing Officer within a period of twelve months even though the Block Assessment was duly completed within the time limit allowed u/s 158 BC of the Income-tax Act after affording an opportunity to the Assessee Company of being heard ?Tribunal was justified in holding that the Block Assessment is bad in law as the Notice u/s. 143(2) of the Income-tax Act has not been issued by the Assessing Officer within a period of twelve months even though the Block Assessment was duly completed within the time limit allowed u/s 158 BC of the Income-tax Act after affording an opportunity to the Assessee Company of being heard ? B) Whether, on the facts and circumstances of the case and in law the Tribunal erred in allowing the preliminary objection of the Assessee Company, under Rule 27 of the Income-tax Rules, with regard to the issue of Notice u/s.143(2) of the Income-tax Act by the Assessing Officer beyond the period of twelve months even though the Assessee did not raise any specific ground with respect to time limit for issue of notice u/s.143(2) of the Income Tax Act before the CIT (A) ?Tribunal erred in allowing the preliminary objection of the Assessee Company, under Rule 27 of the Income-tax Rules, with regard to the issue of Notice u/s.143(2) of the Income-tax Act by the Assessing Officer beyond the period of twelve months even though the Assessee did not raise any specific ground with respect to time limit for issue of notice u/s.143(2) of the Income Tax Act before the CIT (A) ? C) Whether issuance of Notice u/s. 143(2) of the Income-tax Act within one year is mandatory in Block Assessment proceedings during the relevant previous year ?within one year is mandatory in Block Assessment proceedings during the relevant previous year ? 2.These questions are no longer res-integra but are covered against the Revenue by the Judgment of the Supreme Court in Assistant Commissioner ofIncome-tax V/s. Hotel Blue Moon [Civil Appeal No.1198 of 2010 decided on 2ndFebruary 2010]. The Supreme Court has held that even for the purposes of Chapter 14B of the Income Tax Act, 1961, for determination of undisclosed income for a block period under Section 158 BC of the Act, the provisions of Section 142 and sub-sections (2) and (3) of Section 143 are applicable and no assessment could be made without issuing a notice under Section 143(2) of the Act. The Supreme Court also held that the Assessing Officer must necessarily follow Section 142 and sub-sections (2) and (3) of Section 143 of the Act. 3.In the present case, it is an admitted position that the notice under Section 143(2) of the Act was issued beyond the stipulated period. In these circumstances, the questions of law would stand answered against the Revenue in terms of the judgment of the Supreme Court in Hotel Blue Moon(supra). The appeal is accordingly dismissed. There shall be no order as to costs. (J.P. Devadhar, J.) (Dr.D.Y. Chandrachud, J.)